Japan's little train that couldn't

Jason E. Bruzdzinski

November 05, 1993|By Jason E. Bruzdzinski

EARLIER this year, the Clinton administration proposed that the government spend $1.3 billion to research and develop the technology for a new high-speed rail system similar to Japan's shinkansen, or bullet train.

More recently, the Department of Energy, Army Corps of Engineers and Federal Railroad Administration proposed a multi-billion-dollar system of 300-mph "maglev" passenger trains (trains that "float" along gravity-free fields created by magnetic opposition). The first leg of the system would run between Baltimore and Washington.

There are two problems with these plans: First, the government already owns a passenger railroad, Amtrak, it should be getting rid of. It loses more than half-a-billion dollars every year -- $711 million last year alone. Second, Bill Clinton's plan for high-speed transit is based on a model that cost Japanese taxpayers hundreds of billions of dollars before it was privatized five years ago.

In 1957, Tokyo's ministry of transportation undertook the sumo-sized project of modernizing the Japan national railroad. When the bullet train first opened for business in 1964 it shattered rail-speed records, nearly overshadowing Tokyo's main event of that year, the Olympic Games. But at an average daily cost to taxpayers of $20 million, it's not surprising that the railroad's balance sheet stayed in the red through its entire 23 years as a government-run monopoly.

Never did the Japan national railroad post a profit. It piled deficits, one on top of the other, year after year, for more than two decades. By 1970 the railroad employed more than 400,000 workers and continued to hire 10,000 new employees a year until 1987, when Japan's political leaders called the gravy train to a screeching halt.

By that year, the folly of entrusting government bureaucrats with the task of modernizing a commercial railway system had cost Japanese taxpayers an incredible $279 billion in losses.

In 1987, the Japan National Railroad was privatized into six regional passenger railway companies and one freight railway company, together called the new Japan Railways. The reform reflected then-Prime Minister Yasuhiro Nakasone's determination to expose government-protected monopolies to market forces, and thereby to improve service and raise demand.

The split into seven companies injected competition into the debt-burdened, overstaffed and bureaucratically minded railway network. Tokyo eased regulations, and today Japan Railways runs a range of businesses that includes bookstores, food stands and photo-processing centers. Instead of 400,000, the expanded company now employs just 183,000 people.

President Clinton doesn't seem to know anything about Japan's experience. Transportation Secretary Federico Pena recently boasted that the president's proposal to spend $1.3 billion in tax dollars to subsidize high-speed rail and to push state and local governments to spend an additional $2 billion, "represents a major step toward making good on the vast economic and

technological promise of high-speed ground transportation."

The question is: What promise? Amtrak has had no significant increase in ridership, flat revenues and steady losses since 1988. Why will bullet trains be any different?

The development of an integrated high-speed rail transportation system would not only require a massive shift in America from roadway to railway transportation; it would also require the expenditure of hundreds of billions of dollars. Advocates of the -- "maglev" trains, for example, admit it would cost $45 million per mile just to lay the required tracks -- $45.4 billion for the Washington, D.C.-to-Boston corridor alone.

Japan's expensive, failed experiment with government-subsidized high-speed rail should serve as a lesson that government is usually least qualified to oversee and regulate such endeavors.

The Clinton proposal is nothing more than a "government-can-do-it" approach that ignores the Japanese experience. America can't afford to invest billions of dollars in a rail system most Americans would never use.

Jason E. Bruzdzinski is research associate for the Asian Studies Center at the Heritage Foundation, a Washington think tank.